Sell Millwork Direct to the Client & Avoid Subcontractor Status

Acacia Originals is a Houston-based architectural millwork firm headed by Will Fuller. He launched it following the abrupt closure of his previous operation. Fuller emphasizes working directly with building clients, rather than as a subcontractor. Now set to expand by 8,000 square feet, Acacia Originals received the Architectural Woodwork Institute Safety Award last month. Here’s his story:

If you were to close your woodworking business today and restart tomorrow morning with complete freedom to change anything, how would you do it? Would you even do it at all? Or would you begin life in some completely different arena?

I found myself asking these very questions and a lot more at the end of 2004. Turns out the only thing closing that year wasn’t just another date on the calendar, but the very business I had invested 22 years of my life in. You see, we had made a significant error on a large project two years earlier. That set in motion a series of events that ultimately brought about our complete demise.

On December 7, 2004, I had to tell a team of wonderful people that worked very hard to bring us through this calamity, that the battle was over and we didn’t win. It was the last day we would work together and that they would have to find another way to support their families. I found myself financially – and emotionally – bankrupt, after a long, hard fight that cost me just about everything I had.

Two and half years later, and some mostly not so scenic views of harsh, dry desert had yielded no oasis where I could setup a new camp and make a decent living.Whether I realized it or not, I had needed some alone time to figure out that what I wanted to be when I grew up was still one thing: a woodworker.

In my mind, I was going to be anything but that. But circumstances would prove me wrong in this and a few more things that I thought I knew about this business.

In August of 2007, after trying desperately to run away from this world of wood, I begrudgingly re-entered this place where my dreams had died. Was I going to have to settle for something mediocre just to survive? How could I in good conscience ever ask anyone else to risk their future and join me when I had failed so miserably before?

I didn’t know the answers to most of these questions at the time. I just knew that more of the same wasn’t worth any more years of my life.

Early on we learned that, at least for us, there were no magic formulas for success. It made this new pursuit seem elusive but also brought a measure of relief as we discovered that perfection wasn’t necessary to be truly successful.

Here are a few highlights from our current business model. All of this is still a work in progress.

Target only higher-margin projects with a scope of work that’s more complicated than most, so the field of competitors, if any, is limited.

Avoid being a subcontractor – develop direct relationships with the commercial architectural and design community. Become proficient in articulating why they should refer their best clients and most demanding projects directly to your firm. Let them become your greatest cheerleaders.

Teach and encourage that community to understand how and why the risk to all stakeholders in projects is actually less than a traditional model with your firm functioning as a subcontractor to a general contractor.

Develop a highly talented team capable of executing every facet of these projects with extraordinary excellence and integrity.

The goal is not extraordinary profits (although this will occur) but making a positive difference in the lives we touch. We are simply agents for change masquerading as woodworkers and having a lot of fun doing it. Strive to serve well in all things.

Finance, Manufacturing, Personnel

If we drill down a few more layers, here are some of the principals we now embrace: Finance, people and a side on manufacturing. Many of these are radically different than what we practiced before. Now let’s look at layer individually, starting with finance:

Establish from the beginning that every project will fund itself. Avoid using one project to finance another. A 50% deposit required with the signing of your contract is standard policy, with progress and final payments invoiced monthly, no retainage held and Net 30-day payment terms.

Grow your business with as little debt as possible. We borrowed no money for the first three years and had virtually no cash when we started. The first debt was acquired when we purchased the building we were leasing.

Pay down debt as much as possible and as often as possible, if terms permit. Little or no debt in the future allows you more options to manage your business in changing times.

Don’t be afraid to invest in yourself when cash flow allows.

Reward your team well for great performance. Your objective should be to pay above average wages so you can attract and retain the best of the best.

Don’t procrastinate in starting bonus compensation, at the very least for upper management. Consider models for bonuses carefully before initiating one. Add lower tiers of your team when possible.

Outsource everything you can’t afford to buy equipment for today as long as needed, and until the equipment can be proven needed in the long term and the cost justified. Remember, profits are a byproduct of doing everything else well.

The People Factor

Always value people before projects and even profits. The right people doing the right things well in the right measure will yield outstanding returns.

• Hire the best and brightest people you can find, even if it takes longer to find them than you would like.

• Learn to assess character in job applicants and hire for it first and skills second.

• Build an organization where you yourself would genuinely like to work and others will eventually beat a path to your door.

• Give people freedom to try new things and make mistakes. How else will they grow business and find the next great idea?

• Create and implement ways for people to win. Once you’ve found and implemented a few, look for more.

• Train people to see each other and situations like responsible owners instead of mere employees, and they’ll surprise themselves and you with their performance.

• Make time to share a meal you buy for your team a few times a year. Just to say thanks for what they do and make sure you enjoy it with them.

• Ask for feedback from people often. Genuinely listen to what they have to say and always find a way to thank them for saying it. Never react negatively, regardless of the comment. They will quickly cease to believe you are sincerely interested.

• Decide what you want your company culture to look like. Do not try to control or manipulate it but rather gently and patiently steer it towards the objective. Realize that your company will have a culture, and it will heavily influence your team.